Strategies & indicators
How many indicators should a trading strategy use?
Fewer than you think — one to three is the defensible range. Every added indicator adds parameters, and every parameter multiplies the ways a backtest can secretly curve-fit: a strategy with six tuned indicators has an enormous search space in which some combination will always have looked great historically.
Indicators also correlate: RSI, Stochastic and MACD all read momentum from the same price series, so stacking them adds redundancy rather than confirmation. A clean structure is one signal (where's the opportunity), at most one filter (when to stand aside), and explicit exit/risk rules — then validate the whole thing out-of-sample.
The fastest answer is a test
Most 'does X work?' questions take a minute to answer empirically — on real data, with an out-of-sample check, free.
Backtest a strategy freeMore in this topic
Educational content, not financial advice. Backtested and historical figures describe past periods only; past performance does not guarantee future results.